Charting Carmanah's Path

The CEO of Victoria-based Carmanah Technologies has a gift for the gab and
thinking quick on his feet, but he hardly needed those arrows from his
executive quiver Wednesday as he laid out a vision for Carmanah's coming year.

Addressing a full house of more than 110 investors at the company's annual
general meeting, Aylesworth spoke in bullish terms of its future. He was
talking to an audience that was apparently satisfied with the performance
thus far of the company which designs and produces solar-powered LED
(light-emitting diode) lighting.

Other than wondering aloud when the stock would hit $20 -- it closed trading Wednesday at $2.85 on the TSX Venture Exchange -- and why the company had yet to graduate to the TSX itself, Aylesworth was rarely put on the spot.

And if Aylesworth is right, 2004 should see a continuation of that trend.

He told investors there is plenty of growth potential in the company's stream of products that will necessitate a expanding of Carmanah's physical presence and ramping up of production. He also said 2004 could mark the first time sales figures reflect a change in the company's dependence on the marine sector.

"We used to carry the company on the back of the marine sector, but now . . . there's a good uptake in aviation and the transit market," he said, noting 2004 could be a breakthrough year for both markets as they mature.

In 2003, 52 per cent of the company's $9.22 million in total sales were in marine products. That easily eclipsed the 2002 total mark of $6.47 million.

Already sales figures are strong with the company reporting $4.1 million for the first quarter of 2004, an increase of 115 per cent over the first quarter in 2003.

The strongest growth in 2003 was in North America, where sales increased by $2.5 million, followed by Europe which saw a sales increase by about $200,000.

But Aylesworth says Europe is a key priority for the company where it intends to open a branch office.

"The reason Europe is (a priority) is because there's so much at stake with the things we're doing there," he said, referring to a long-term investment of time and money on trial projects.

"We will definitely be opening up an office of some kind in London ... we'll have two or three staff and a small office to begin with and then start our European efforts."

As for a presence in the U.S. where the company has made significant strides, Aylesworth says they are looking for an acquisition target.

"It's a really nice way to get a footprint there," he said.

"If we don't, then we'll start building somewhere."

He didn't provide a hard timeline for the physical expansion, though he did say you can only chew off a major deal like that realistically every nine months. In 2003, Carmanah bought Calgary-based AVVA Technologies to add LED-signage to the portfolio of the company's products.

"We're having to act like a bigger company because it's coming at us fast," he told investors. That means pressure to graduate to the TSX.

Praveen Varshney, Carmanah's CFO, said right now the company enjoys its status as a big fish in the little pond that is the Venture Exchange, where Carmanah is often touted as a success story and gets good press from the exchange itself.

"Right now we don't feel the limitations (of being on the Venture Exchange)," added Aylesworth.

"In time we likely will, but why pay if you don't feel them? I suspect at some point we won't have much choice but to graduate."

Graduating may increase exposure, but it comes with a cost, and Aylesworth got cheers from the investors by saying right now the move isn't being made because of the company's innate "cheapness."